7.23 -0.05 (-0.69%) Sell

PNNT is a falling knife, continues to bleed every investor trying to catch it

13 min read

PENNANTPARK INVESTMENT CORP ranked among the worst performers on Friday. It returned -0.69% to close at 7.23. It is currently trading +12% above it's 52 week low of 6.41 and is down only -7% from it's 52 week high.

[Themes containing PNNT]

Buy-and-Hold investors in PNNT experienced a maximum drawdown of -10.6% over the last three months. It returned -4.99% during this down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +0.55%.


PNNT has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, PNNT underperformed the SP500 index on 47% days. Which indicates that on days PNNT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months PNNT was mostly loss making and delivered on average -0.07% per day. It's best return during this period (of +5.0%) was on Friday, 16 Nov, 2018. While it's worst loss in the same period (of -2.89%) was on Thursday, 11 Oct, 2018. There was initially a bullish trend during this period which started on 28 Sep, 2018 and went on till 4 Oct, 2018. The bullish trend returned +2.92% to investors. This was followed by a bearish trend that started on 7 Nov, 2018 and ended on 12 Nov, 2018. This bearish trend lost -2.39% of investor capital.

On monthly basis, PNNT delivered profits and losses in equal number of months. PNNT delivered profits less regularly than SP500 index. PNNT significantly outperformed SP500 index in Jul 2018, when it returned +7.38% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. PNNT had a shorter streak of profitable months than SP500 index. It only went up in 2 straight months during the last year.

"There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know. Then again, there is a third type of investor -the investment professional, who indeed knows that he or she doesn't know, but whose livelihood depends upon appearing to know.

PNNT is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in PNNT's volatility from 21 Sep, 2018 to 16 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that PNNT has significant positive skewness in it's return distribution. This indicates that investors can expect PNNT to recover from drawdowns quickly. Which makes PNNT a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than PNNT. Therefore, SP500 must receive a lower allocation than PNNT in your portfolio. SP500 index usually has shorter drawdown period than PNNT.

On a general note (since you are interested in PNNT), AMD is a mid cap that deserves to be closely tracked for investment opportunities.

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